There were reports about the Trump administration getting a stake in Intel, but little was discussed about whether the venture would require Congress's approval.
U.S. Government’s Potential Intel Stake Could Be Far More Complex, Likely Bringing Legal and Congressional Hurdles
[Update]: Bloomberg has reported that the Trump administration is looking to use CHIPS Act funds to acquire a partial stake in Intel, which means that aid money will ultimately be converted into equity. It is claimed that impending grants under the CHIPS Act could be combined with other government funding sources for an Intel stake, although the talks are at an early stage.
[Original]: Intel has become a political issue now, especially after CEO Lip-Bu Tan met with President Trump a few days ago. After the meeting, it was reported that the government is looking to acquire a stake in Intel, which would be intended to fund domestic fab projects such as the Ohio facility. However, when the government decides to invest in a corporation, it usually isn't as simple, and there are a lot of details that we have to take into account. However, for the deal to actually happen, either the Trump administration would need to refer to Congress, or provide a bailout package to Intel.
Well, a bailout isn't the right move for now, considering Intel's finances aren't in a position for one. However, we say this because back in 2009, the US Treasury bought a stake in General Motors during the Great Financial Crisis, which was part of a bailout package. The finances were given under TARP (Troubled Asset Relief Program). The deal required GM to declare Chapter 11 bankruptcy and, more importantly, come up with a viability plan.
When you look at the GM deal, it's clear that Intel isn't in the right position for such conditions, so a bailout package gets out of the equation. One of the other possibilities is if a US department, such as DoD, acquires a stake in Intel, which has been done previously, under the DoD-MP Materials deal. Now, that particular venture didn't require Congress's approval since DoD already had pre-approved funding authority with DPA (Defense Production Act), and the scale of stake acquisition wasn't as large.
So, suppose President Trump and his administration want an Intel stake. In that case, they would need congressional approval to arrange the funding for the deal, considering that setting up facilities requires 'billions of dollars', if not more. Even in GM's case, the auto bailout portion was a part of the congressional debate before it actually happened. Considering the legal procedures associated with getting something passed by Congress, Intel's stake acquisition might be a time-consuming venture.
About the author: Muhammad Zuhair is a hardware and technology reporter for Wccftech, specializing in the semiconductor industry and the complex interplay between technology, manufacturing, and geopolitics. His coverage focuses on the corporate strategies and technological roadmaps of industry giants like TSMC, NVIDIA, Samsung, and Intel. Zuhair's expertise lies in deconstructing complex topics such as fabrication nodes (e.g., 2nm process), the economic impact of policies like the CHIPS Act, and the strategic development of AI infrastructure from NVIDIA, AMD and Intel.
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